Well, if we talk about personal data collection, I think not only centralized exchanges are selling customer data to other third parties but even banks and other organizations like apple or Google are also doing that. That is why many people do not participate in the cryptocurrency market but their information is sold on the internet.
In my opinion, if we are already citizens of a country that has been issued an ID and use devices and services provided by organizations, then our identity has long since ceased to belong to us. And are you sure you don't use your bank account, insurance card, smartphone, email...
Look, doing KYC on a crypto exchange and doing it in a bank is not the same thing. When we do the KYC on a bank, they do not know if we own any crypto or not. Your apple account or a google account does not ask for your real identity or your photo. I do not know about apple but I know about google. I use Gmail and other google services but it never ask for my identity. Even if it ask for names or birthday date, you can easily give incorrect information and noting will happen.
For banks, they do the KYC process on their office and the chance of identity stealing is minimum. But, the purpose of using crypto is to maintain your privacy. We do not use banks for privacy enhancement. So, it does not matter if we do KYC there or not. But, when we KYC on crypto exchange or a Casino, they know we are crypto users and this is not good for privacy. Right?